JBIC signs loan agreements totaling Rs 11,000 crore to support Indian Industry

The Japan Bank for International Cooperation (JBIC) signed loan agreements totaling about Rs 11,000 crore with the State Bank of India (SBI) and NTPC in support of India’s manufacturing and renewable energy sectors, according to a statement on Wednesday.

The JBIC agreed to provide $1 billion (approx Rs 7,400 crore) to SBI for funding the manufacturing and sales business of suppliers and dealers of Japanese automobile manufacturers as well as for the provision of auto loans for the purchase of Japanese automobiles in India, the JBIC said.

The Japanese lender also signed an agreement for financing worth JPY 50 billion (approx Rs 3,500 crore) to state-owned power generation company, NTPC for solar power generation projects and installation of environmental equipment in India, the statement said.

The funds to SBI would dovetail into the government’s Make in India initiative by stimulating domestic manufacturing while also assisting the Centre’s pandemic response to support micro, small and medium enterprises, it said.

While India’s automobile market was ranked fifth largest globally in 2019, a major portion of that market was serviced by Japanese manufacturers, making it a significant market for the country, the JBIC said.

“The loan will help promote smooth funds flows for the whole range of business operations of Japanese automobile manufacturers in India, from production to sales, thereby serving to maintain and improve the international competitiveness of Japanese industry,” it said.

The funds come in the backdrop of the Indian auto industry recovering from a sharp fall in production and sales during the lockdown to post a 26.45% growth in passenger vehicle sales in September, according to data from the Society of Indian Automobile Manufacturers.

Similarly, the financing provided to NTPC would aid the government’s efforts in developing renewable energy projects and reducing air pollution by shifting away from coal-fired power, it added.

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